GEK TERNA set to develop new 660-MW thermal unit

GEK TERNA is expected to finance its development of a gas-fueled power station with a 660-MW capacity in Komotini, northeastern Greece, through bond funds totaling 500 million euros, sources have informed.

In a company statement, GEK TERNA noted it intends to use 400 million of 500 million euros in bond funds to finance the group’s investment program, which includes gas-fueled power generation.

GEK TERNA is close to reaching an investment decision on this facility, the sources added. It would represent the third thermal unit involving the group.

GEK TERNA, which has the potential to play a key role in renewable energy through Terna Energy, is not overlooking thermal-unit developments.

Greece’s decarbonization strategy and the dominance of natural gas as the main fuel during the energy transition are two factors creating major opportunities for the GEK TERNA group.

Other vertically integrated electricity producers are also preparing new thermal facilities. The Mytilineos group is already constructing an 826-MW gas-fueled power station in the Boetia area, slightly northwest of Athens. This unit is expected to be launched next year.

A licensing procedure by Elpedison, also for an 826-MW facility, in Thessaloniki, is maturing.

In addition, the Copelouzos group is making progress on licensing for a 660-MW facility in Alexadroupoli, northeastern Greece. Company official Kostas Sifneos recently said this facility’s launch is scheduled for 2022.

The country’s big energy players are also continuing to eye Balkan markets for electricity exports, pundits informed.

Natural gas provides half of domestic generation in May, RES also on the rise

Natural gas’ share of overall electricity generation in Greece reached 50.1 percent in May, a 29 percent increase compared to the same month a year earlier, highlighting that the country’s energy transition is well and truly in motion.

Renewable energy output is also on the rise, increasing by 30 percent between May this year and last May.

On the contrary, lignite-fired electricity production plummeted 87 percent year on year.

Gas-fueled power station generation covered 38.5 percent of the grid’s needs in May, RES production captured a 29.62 percent share, electricity imports contributed 23.14 percent, hydropower output provided 6.07 percent and lignite units just 2.66 percent.

In the RES sector, wind energy led the way with a 49.82 percent share of this sector’s grid contribution in May, solar energy followed with 40 percent, small-scale hydropower facilities were next with 4.68 percent, biomass-biogas was represented with a 3.68 percent share, and CCHP (combined cooling, heat and power) with 1.81 percent.

Electricity imports and exports are an emerging sector with an increasingly important role in balancing national grids, a prospect that is attracting market players, data covering the year’s first five months has shown.

Electricity imports into Greece via the interconnection shared with Italy captured a 42.38 percent share of overall imports in May, a sharp rise from the previous month’s 32.35 percent share through this link.

Electricity imports from Bulgaria fell to 8.38 percent of the overall amount in May from 23.1 percent in April. Minor changes, between April and May, were registered for Greek imports from interconnections with Albania, North Macedonia and Turkey.

Greek electricity exports to Italy fell sharply to 7.56 percent of the overall total in May from 49.51 percent in April.

The country’s electricity exports to Turkey and Bulgaria rose significantly. Exports to Turkey represented 39.47 percent of Greek power exports in May, up from 17.38 percent a month earlier. Electricity exports to Bulgaria represented 25.69 percent of Greece’s total in May, much higher than April’s 6.17 percent through this interconnection.

 

Wholesale electricity prices rising, up to €47.30/MWh today

Wholesale electricity prices, determined by the System Marginal Price, are rebounding following a significant drop over the past few weeks.

The rise is being fueled by an anticipated increase in demand. A sidelined 600-MW line linking Greece with Bulgaria, depriving the system of electricity imports via this route, as well as a disruption in operations at an Elpedison power plant in Thessaloniki are two other contributing factors.

In addition, the Revythoussa LNG terminal just off Athens is not under any pressure, a factor subduing gas-fired unit bids and subsequently lowering the SMP.

Based on grid orders placed for today, the SMP has climbed to 47.30 euros per MWh, up from a level of around 30 euros per MWh five days earlier and 14.20 euros per MWh on May 1. Bidding by units has gradually risen since early May.

Demand, today, for domestic consumption and exports is estimated to reach 127 GWh, 40 percent of which is planned to be covered by natural gas-fired power stations, 30 percent by RES and hydropower plants, 23 percent by electricity imports, and 7 percent by lignite-fired power stations.

The SMP level will be determined by gas-fired power stations for 22 hours today, lignite-based generation will shape the price for one hour and imports for the remaining hour.

Energy groups pressing ahead with natural gas-fired unit plans

The country’s major energy groups are pushing ahead with investment plans for new gas-fired power stations despite the pandemic’s unprecedented impact on the economy and electricity market.

Mytilineos, a vertically integrated group at the forefront of electricity production and supply, began constructing an 826-MW energy center at Agios Nikolaos in the Viotia area, slightly northwest of Athens, last October and is continuing to press ahead with this project.

Investment plans by other players are also maturing. GEK-TERNA is moving ahead with licensing procedures for a 660-MW unit in Komotini, northeastern Greece. The Copelouzos group is paving the way for a 660-MW facility in Alexandroupoli, also in the northeast, while Elpedison is carrying on with procedures for an 826-MW power station in Thessaloniki.

Copelouzos could partner with an investor for the group’s Alexandroupoli project, sources informed.

All the aforementioned corporate groups are positioning themselves in a new energy landscape being shaped by the dominant role of natural gas in the transition towards renewable energy and cleaner energy sources.

This trend became very apparent during the lockdown in Greece. Natural gas and the RES sector covered 60 percent of domestic electricity demand in March.

Power utility PPC is pushing ahead with its decarbonization program without any backtracking, despite the crisis. This is creating a need for new and modern gas-fired power stations.

Furthermore, Greek energy groups are continuing to eye Balkan markets for prospective electricity exports. Electricity generation in the neighboring region has not been satisfactorily upgraded in recent decades, market officials pointed out.

Vertically integrated groups are also eagerly anticipating a new permanent CAT mechanism.

Independent energy players rushing to fill PPC lignite void

The country’s major independent energy groups are forging ahead with well anticipated plans to cover prospective electricity generating voids that will be created by power utility PPC’s withdrawal of lignite-fired units, now expected sooner following a government plan for a swifter withdrawal of all lignite-fired power stations, monopolized by the state-controlled power utility.

Speaking at the UN Climate Action Summit in New York last week, Prime Minister Kyriakos Mitsotakis declared full decarbonization would be achieved in Greece by 2028.

The Prime Minister’s pledge for a lignite-free Greece in less than a decade has not taken domestic independent energy groups by surprise. As early as three to four years ago, they had foreseen an approaching end of the lignite era in Greece and around Europe.

So, too, had PPC’s leadership. But the corporation’s lignite monopoly, lignite dependence of local economies in lignite-rich areas, especially Greece’s west Macedonia region, as well as perpetual political interests attached to PPC over the years, have all played roles that have prevented the utility from turning to other energy sources such as natural gas and renewables.

Over the past year or so, major energy groups in Greece such as Mytilineos, GEK-TERNA, Copelouzos and Elpedison, as well as enterprises such as Elvalhalkor and Karatzis, have taken decisions to seek licenses for the development of new gas-fired power stations. The foundation stone of a Mytilineos unit in Boetia (Viotia), northwest of Athens, will be placed by the Greek Prime Minister at a ceremony scheduled for tomorrow.

A planned decarbonization process in neighboring Bulgaria, electricity needs in North Macedonia, and Greek power grid operator IPTO’s imminent upgrade of grid interconnections with Balkan neighbors, especially the aforementioned countries, are all creating further electricity export opportunities for Greek market players.

 

 

PPC forced to sell ‘excessive electricity amounts’ for NOME auctions

Electricity amounts made available by the power utility PPC for NOME auctions during the first few months of 2019 exceeded the utility’s output generated by lignite and hydropower sources, chief executive Manolis Panagiotakis has told company shareholders.

“In other words, PPC is obligated to provide to third parties electricity quantities that do not only stem from lignite and hydropower sources, but other fuel sources as well, such as natural gas, as well as renewables,” Panagiotakis contended.

Electricity amounts provided by PPC for NOME auction usage in 2018 represented 77 percent of the utility’s total lignite and hydropower production, according to the PPC boss.

This level of commitment is the cause of major losses for PPC, Panagiotakis told shareholders.

NOME auctions were introduced about three years ago as a means of offering independent players access to PPC’s lower-cost lignite and hydropower sources.

Recipients purchase electricity at low prices and then sell abroad, the PPC chief said, adding that electricity demand in Greece fell by 1.2 percent in 2018 compared to the previous year, to 57,122 GWh.

However, overall electricity demand, including exports, rose by 2.2 percent as a result of a 75.2 percent increase in exports – primarily NOME-acquired amounts by third parties –  through northern grid interconnections, Panagiotakis added.

NOME auctions have not helped open up the market to greater competition as PPC’s market share contraction in the retail electricity market dropped to just 81.9 percent in 2018 from 86.7 percent in 2017, the PPC chief noted.

 

Greek power producers also eyeing Balkan export potential

The country’s power producers are focusing on the market prospects of  neighboring countries along with a heightened interest in Greece’s electricity market as a result of the upcoming elections, seen bringing the main opposition New Democracy party into power for more decisive reform action at power utility PPC, and intensified market competition.

Investments plans by PPC, currently developing its Ptolemaida V power station, as well as by private-sector enterprises, which have announced plans for five new state-of-the-art units, are expected to create an overabundance of electricity, even of all these plans are not executed. This is one of three main factors turning the attention of power producers to neighboring markets.

Also, it has become clear that Balkan markets lack flexibility in electricity generation as they primarily depend on coal, while gas networks that could support flexible gas-fueled power stations in the region are insufficient.

A third factor contributing to the heightened the interest of local producers for energy-related business in the wider region is Greek power grid operator IPTO’s ongoing upgrade of Greece’s grid interconnections with neighboring countries, especially Bulgaria and North Macedonia, which promises to create greater export potential.

Besides the independent producers, PPC is also looking to capitalize on this export potential.

Domestic electricity consumption down again in 2018

Domestic electricity consumption has continued its slide of recent years, falling by 1.2 percent in 2018, to 57,122 GWh from 57,845 GWh in 2017, a reflection of the ongoing struggles of households and businesses, market data released by the main power utility PPC has shown.

Overall electricity demand in Greece rose by 2.2 percent in 2018 as a result of a 75.2 percent increase in electricity exports to other European markets through northern interconnections.

The increased electricity exports were primarily attributed to exports of some of the electricity amounts acquired at local NOME auctions. This gateway to other markets has been significantly narrowed as a result of restrictions imposed by RAE, the Regulatory Authority for Energy.

Electricity imports in 2018 also rose, increasing by 23.6 percent, or 2,143 GWh. PPC imported 506 GWh of this amount.

As for retail electricity market shares, PPC’s share fell from 86.7 percent in 2017 to 81.9 percent in 2018. Independent suppliers made their greatest gains in the low-voltage category.

Export limit among factors seen subduing NOME prices today

Export limits imposed by RAE, the Regulatory Authority for Energy, on electricity amounts acquired by bidders at NOME auctions are expected to play a fundamental role in subduing prices at today’s first session for the year, despite the relatively modest electricity amount of 350 MWh/h offered and the currently elevated System Marginal Price (SMP), or wholesale, levels.

The new NOME electricity export limits, being implemented for the first time today, will severely limit the ability of players to transmit amounts to regional markets.

Lower price levels in neighboring markets, where SMP levels are currently lower than they are in Greece and are expected to drop further as a result of greater hydropower output generated by heavy rainfall this winter, are also expected to play a role in restricting Greek electricity export activity.

A third factor seen keeping NOME prices low today is the main power utility PPC’s seemingly failed attempt to sell its lignite-fired power stations at Megalopoli and Meliti, a bailout-required disinvestment. If speculation of the sale’s failure is made official, electricity amounts at the ensuing NOME auctions will not be reduced.

Today’s NOME price level stands no chance of reaching the lofty level of 54.74 euros per MWh registered at the previous auction as a result of the three aforementioned factors, pundits have asserted. Instead, they forecast a forty-something price level.

NOME auction rescheduled for February 8 amid pending issues

RAE, the Regulatory Authority for Energy, has rescheduled the country’s first NOME auction for the year from January 23 to February 8, a key reason being to enable additional time for the introduction of a measure intended to restrict exports of electricity amounts acquired at the auctions.

The Energy Exchange, participating in a public consultation procedure concerning the matter, needs to submit supplementary observations on the export-limiting measure before the plan is implemented on time for the auction in February. A short follow-up public consultation procedure will need to be wedged into the process.

The anticipated outcome of the main power utility PPC’s bailout-required disinvestment of lignite units is another reason for the auction’s rescheduling. Just days remain before the sale’s January 23 deadline for binding bids expires, unless an extension is granted, which could be necessary as a result of various unresolved matters.

The disinvestment’s outcome will determine whether an additional 520 MWh/h electricity amount is added, as a penalty, to the year’s NOME auction total of 1,444 MWh/h because of PPC’s failure to reach a retail electricity market share contraction target of 62.24 percent set for the end of 2018. The end-of-2019 target imposed on PPC is 49.24 percent.

RAE will need to decide, by the end of this month, on how penalty electricity amounts will be distributed to the year’s NOME auctions.

Small offering for next NOME auction prompts reaction

Electricity market players, especially vertically integrated companies, have raised objections to a subdued electricity amount of 240 MWh/h decided on by RAE, the Regulatory Authority for Energy, for the year’s first NOME auction, scheduled for January 23, as well as the failure, so far, by authorities to decide on export restrictions concerning electricity amounts acquired at these auctions.

The complaints were expressed in a letter forwarded by ESAI/HAIPP (Hellenic Association of Independent Power Producers) to RAE, energypress has been informed.

RAE plans to reserve bigger electricity amounts for later in the year, including 604 MWh/h for the year’s final NOME auction, expected in October. The authority is obviously holding back as it awaits the outcome of the main power utility PPC’s bailout-required sale of lignite units, now in progress.

Independent electricity suppliers fear the small quantity decided on for the year’s opening session, combined with Greece’s elevated System Marginal Price (SMP) and higher wholesale electricity prices in Europe, will intensify bidding competition and prompt further NOME price hikes on January 23.

NOME auctions were introduced in Greece over two years ago to offer independent players access to PPC’s lower-cost lignite and hydropower sources for more competitive pricing policies.

Though the European Commission has already provided permission for the implementation of NOME-electricity export restrictions, RAE has yet to reach a decision, despite launching a public consultation procedure on the matter prior to the previous session late last year.

RAE has divided 1,444 MWh/h into four NOME auctions for 2019. The amount represents 22 percent of the country’s total electricity consumption, as stipulated in the bailout agreement, plus 171 MWh/h, the remainder of a penalty addition prompted by PPC’s failure to reach a market share contraction target set for the first half of 2018.

If all goes well with PPC’s sale of the Megolopoli and Meliti power stations included in its bailout-required investment of lignite assets, then the NOME amount will be reduced to represent 13 percent of Greece’s total electricity consumption.

PPC was well over a 62.24 percent market share contraction target set for the end of 2018 and needs to reduce its share to 49.24 percent by the end of this year.

 

NOME electricity export limit to be introduced for next auction

RAE, the Regulatory Authority for Energy, is believed to be close to finalizing the details of an electricity export restriction on NOME-acquired amounts following the eventual approval by the European Commission.

The measure’s finalized shape is expected within the next few days, which should provide ample time for its implementation ahead of the next NOME auction, expected early in 2019.

The European Commission, in a letter forwarded to RAE late November, had left open the possibility of electricity export-restricting measures, but, at the same time, reminded of EU law forbidding the obstruction of trade.

Brussels ended up permitting the export restriction as part of a wider effort aiming to further intensify competition in Greece’s retail electricity market.

Driven by considerably higher wholesale electricity prices promised in other EU markets, Greek NOME auction participants, especially traders, have been exporting amounts acquired at these local sessions.

NOME auctions were introduced in Greece over two years ago to offer independent players access to the main power utility PPC’s lower-cost lignite and hydropower sources for more competitive pricing policies.

Considerably higher NOME prices generated at various auctions prompted RAE to investigate the matter.

A NOME electricity export limit plan presented by RAE in October proposed restrictions for all firms with respective levels determined by the amount of consumption represented in the retail market. Any electricity amounts found to exceed these export limits would be priced at the System Marginal Price (SMP), or wholesale price, not relatively lower prices secured at auctions, according to the RAE proposal.

 

 

Brussels appears prepared to accept NOME exports limit plan

The European Commission appears to be showing an increasing understanding for the need by RAE, the Regulatory Authority for Energy, to impose export limits on electricity amounts acquired at NOME auctions, energypress sources have informed.

RAE officials, now preparing the authority’s NOME terms revision plan to be submitted to Brussels for authorization, are in regular contact with European Commission officials for guidance.

RAE is aiming for its revised terms to be implemented in time for Greece’s next NOME auction, which may take place during the first quarter of 2019. A date has yet to be set.

The authority wants to limit NOME electricity exports being carried out by traders and suppliers in Greece, exploiting considerably higher wholesale electricity prices in other EU regions.

NOME auctions were introduced in Greece over two years ago to offer independent energy firms access to PPC’s lower-cost lignite and hydropower sources. The NOME-related exports are depriving local players of favorably priced electricity amounts for Greece’s retail electricity market.

Brussels, citing the EU’s free trade principles, expressed some hesitation over the export limit plan in a letter forwarded to RAE late last month, but also indicated it would be open to measures.

Brussels opposes Greek export limit plan for NOME electricity

The European Commission has expressed its opposition to a plan by RAE, Regulatory Authority for Energy, aiming to limit exports of electricity amounts acquired at Greece’s NOME auctions – following an energy exchange recommendation in a public consultation procedure – but notes certain exceptions would be permitted, in a letter forwarded to the authority.

Brussels reminds RAE restricting free trade is forbidden by the EU, while adding European courts have made clear that, besides certain quantitative restrictions, trade restrictions implemented as official state policy are not permitted.

Greek authorities have been asked to prove if the NOME export limits being contemplated could qualify as exceptions.

RAE, in related talks expected soon with European Commission authorities, intends to highlight the need for NOME export limits and will be hoping for an agreement ahead of the first auction in 2019.

The Brussels letter’s first part focuses on EU concerns over China’s presence in the Greek energy market.

 

 

Traders appeal to Brussels over NOME export limit proposal

Energy firms primarily active in transboundary electricity trade are seeking European Commission support in an effort to prevent the adoption, in Greece, of restrictions – including indirect measures – on exports of electricity amounts secured at local NOME auctions.

Traders were prompted into action by a Greek Energy Exchange proposal forwarded to a public consultation procedure staged by RAE, the Regulatory Authority for Energy, calling for NOME-related electricity exports to be sold at just under the System Marginal Price (SMP), or wholesale price, rather than lower prices secured at the auctions.

NOME auctions were introduced about two years ago to offer independent energy firms access to the main power utility PPC’s lower-cost lignite and hydrocarbon sources as a means of breaking the utility’s retail electricity market dominance.

In their appeal, export-minded traders have cited the EU’s free-trade principle as their main argument. It is not yet clear how the European Commission could respond.

 

 

 

Reserved hopes of NOME price containment this Wednesday

New NOME auction-related export disincentives are expected to subdue – at the next session, this Wednesday – the aggressive approaches of certain auction participants buying considerable electricity amounts with the intention to export to higher-price markets.

However, expectations of the measure’s effectiveness remain reserved as other factors could still drive up prices and once again deprive independent electricity suppliers of lower-cost wholesale electricity as a tool to compete against the main power utility PPC in the retail market.

Wholesale electricity prices are currently flying high in European markets but Greece’s SMP, relatively lower at levels of around 70 euros per MWh, has only partially reflected this trend.

Market fears fueled by rising CO2 emission right prices could prompt aggressive bidding among auction participants this Wednesday.

Such factors have raised fears of a repeat, if not deterioration, of results at Greece’s previous auction, which generated a record price level of 48.8 euros per MWh, approximately 3.5 euros over the previous record set at the end of 2017.

Costlier wholesale price mulled for exported NOME electricity

NOME auction participants will not face any quantitative or post-purchase usage restrictions concerning electricity amounts bought at auctions but will need to cover a higher System Marginal Price (SMP), the official electricity wholesale price, for amounts found to have been exported by follow-up checks, according to a proposal expected to soon be forwarded by LAGIE, the Electricity Market Operator.

It is believed that the European Commission, which has objected to the imposition of export limits on NOME amounts, would endorse such a plan.

Certain electricity suppliers, especially traders possessing supply licenses but no – or virtually no – customer bases, have been buying considerable amounts of lower-priced electricity at NOME auctions for export, a practice offering wide profit margins given the higher electricity prices secured abroad.

Such export-minded participants are pushing NOME auction prices higher for independent suppliers seeking lower-cost wholesale electricity prices at the auctions to compete against the still-dominant power utility PPC in the Greek market.

PPC faces retail electricity market share contraction targets of 62.24 percent by the end of 2018 and 49.24 percent by the end of 2019. The power utility’s market share, which has contracted at a slower-than-required rate, remains at a level of around 80 percent. The issue is expected to be tabled for discussion by lender technocrats, now back in Athens.

RAE to impose NOME auction restrictions to counter abuse

RAE, the Regulatory Authority for Energy, appears determined to implement measures aimed at limiting NOME auction abuse by market players and accelerating the main power utility PPC’s retail electricity market share contraction for greater market competition.

In its monitoring of NOME auctions and ensuing sales, by participants, of electricity amounts to secondary markets over the past few months, RAE has noticed an accumulation of futures products disproportionate to customer base sizes and growth rates of certain suppliers and traders.

Subsequently, four companies were summoned by RAE to hearings. Three of these testified yesterday.

According to sources, the representatives of all three companies – traders and electricity suppliers holding small market shares – contended that they have not breached any market rules, while also noting NOME auctions have been staged without restrictions, as was requested by the country’s lenders.

These companies will need to follow up arguments offered at their hearings with related documents before RAE decides whether to hand out charges or not.

RAE has not been able to determine the exact amounts of electricity exported from Greece to other European markets, where wholesale prices are relatively higher, but has resorted to various tools monitoring the market and players, analysts noted.

The authority is preparing to introduce specific NOME auction regulations, including restrictions, sources informed.

During the bailout era, which has just ended, lenders, citing free market rules, did not want any restrictions imposed on Greece’s NOME auctions. However, the country’s lenders have, along the way, given RAE some leeway to take corrective action and counter ongoing abusive practices by NOME participants.

NOME auctions were introduced in Greece about two years ago to offer third parties access to PPC’s lower-cost lignite and hydropower sources.

 

 

 

NOME record price to prompt tariff hikes, exporters unfazed

The record price level of 48.8 euros per MWh reached at yesterday’s NOME auction will most likely force suppliers to raise prices offered to consumers, market officials agree.

Though this price level does offer local electricity suppliers protection against dangers stemming from rising wholesale electricity prices both in Greece and abroad, it does not provide independent suppliers any leeway to undercut prices offered by the still-dominant main power utility PPC.

The power utility must reduce its retail electricity market share to less than 50 percent by 2020, according to the bailout agreement.

The diminished ability for true competition in Greece’s retail electricity market once again brings to the fore PPC’s 15 percent discount offer for punctual customers, introduced two years ago.

However, unlike previous reactions, the discount’s removal is now not only being called for by independent electricity suppliers but also being considered by PPC.

The power utility’s chief executive Manolis Panagiotakis has not ruled out such a move, while a business plan prepared for PPC by consulting firm McKinsey stresses a need for the client to boost revenues by raising customer tariffs.

Should PPC end or revise downwards its 15 percent discount offer, all suppliers can be expected to respond by increasing their tariff price levels. Over the past couple of years, independent suppliers have had choice but to adjust their tariffs based on standards shaped by PPC’s overaggressive pricing policy.

Besides the role played by local suppliers seeking to cover their domestic market needs, NOME prices were also pushed up yesterday by traders who sought to buy for prospective exports to foreign markets offering considerably higher prices.

Evidently, existing NOME auction regulations are insufficient, as was highlighted by the large quantities acquired yesterday by participants with export activity in mind.

A move by RAE, Regulatory Authority for Energy, on the eve of yesterday’s auction, to summon five suppliers to hearings over NOME export abuse suspicions linked to previous auctions, which could lead to fines, did little, or nothing, to thwart such future intentions at the latest auction.

 

 

 

Five firms to face hearings over NOME export suspicions

Five power supply firms that had purchased electricity amounts disproportionate to their retail market shares at previous NOME auctions have been summoned to hearings by RAE, the Regulatory Authority for Energy.

The authority reached this decision yesterday, on the eve of today’s latest NOME auction, to determine whether the five firms have acquired electricity amounts bigger than their domestic market needs in order to export excess amounts either directly or indirectly, via traders. If so, fines could be imposed.

Even though export limits implemented in the past have been lifted following a demand by the country’s lenders, RAE continues to view the NOME auctions as a tool for supporting competition and shifting retail electricity market shares from the still-dominant power utility PPC to independent suppliers.

NOME auctions offer third parties access to PPC’s lower-cost lignite and hydropower sources.

“Anybody contravening this principle is breaking the rules and needs to offer explanations,” a RAE official told energypress.

LAGIE, the Electricity Market Operator, has eliminated two firms, OTE and Eunice, from today’s NOME auction for insufficient provision of electricity load data.

Both OTE and Eunice described their eliminations as unfair and declared they would appeal. But LAGIE appears determined to send out a strict message to all participants that NOME irregularities will not be tolerated.

It is believed traders will bid aggressively at today’s auction for electricity amounts to be exported to markets where wholesale electricity prices are higher.

Aggressive bidding by export-minded traders would force local suppliers to purchase NOME electricity amounts at higher prices offering narrower profit margins for supply activity in the local market.

Officials fear the increasing cost of CO2 emission rights and elevated wholesale electricity prices around Europe could also play a role in lifting bidding prices at today’s auction.

A starting price of 36.34 euros per MWh has been set for today’s session, up from the previous level of 32.05 euros per MWh.

A planned phasing out of the auctions in accordance with PPC’s bailout-required disinvestment of lignite units, as well as an uncertainty surrounding the auctions following the target model’s implementation, are other factors expected to impact today’s session and motivate participants to bid hard to acquire the biggest possible electricity amounts.

 

Mass electricity exports feared as latest NOME auction approaches

Excessively high wholesale electricity prices in regional markets surrounding and directly impacting the Greek market will most likely offer traders major export opportunities for electricity amounts purchased at local NOME auctions, organizers suspect.

This is one of the main reasons why the country’s independent retail electricity suppliers, especially those with wide customer bases and a greater need for lower-cost wholesale electricity, fear auction prices at this Wednesday’s NOME session will be driven up to levels that will dig deeply into profit margins.

RAE, the Regulatory Authority for Energy, appears to be preparing to monitor the situation in an effort to counter abusive behavior by auction participants.

According to sources, RAE has good reason to believe that certain players are planning to bid very aggressively in an effort to secure electricity amounts for export.

RAE has already forwarded related letters to suppliers and traders who took part in the previous NOME auction to examine their use of electricity amounts acquired at previous auctions.

The authority may decide to stage hearings if unjustifiably large NOME electricity quantities are seen exported to foreign markets following Wednesday’s session.

NOME auctions were introduced in Greece roughly two years ago to offer independent players access to the main power utility PPC’s lower-cost lignite and hydrocarbon sources, the objective being to increase price-related competition in the country’s retail market.

Export limits for NOME-acquired electricity amounts have been lifted, enabling players to move freely. Even so, RAE maintains the right to conduct investigations and impose fines if it determines abusive behavior by participants.

A total of 400 MWh/h will be offered at the July 18 auction, whose starting price has been increased to 36.34 euros per MWh.

Besides the influence of regional markets and export opportunities, pundits also expect aggressive bidding this Wednesday as a result of the uncertainty concerning electricity amounts to be offered at future NOME auctions, planned to be phased out as PPC’s bailout-required disinvestment of lignite units progresses.

Many electricity suppliers are expected to bid for the biggest possible quantities at Wednesday’s auction to gain leeway for competitive offers to customers.

Wholesale electricity prices around Europe are also being pushed up by rising fuel and CO2 emission right costs, another factor that could motivate local traders to export bigger amounts.

 

Exporters turn north, Greece-Italy link closed for maintenance

The Greece-Italy electricity interconnection, closed over the past week for maintenance work, has transformed market conditions for local traders as the Italian market, normally offering alluring prices for exports during considerable parts of the day, is currently not accessible.

Over the past year or so, electricity amounts acquired at Greek NOME auctions and left unabsorbed by the local market have been exported to Italy.

As a result of the temporary block towards the Italian market, Greek electricity exports can currently only be channeled through gateways in the country’s north, as has been highlighted by a sharp increase of exports through this region.

Prior to the commencement of maintenance work on the power cable interconnecting Greece and Italy, electricity exports to the north were usually limited to no more than 1,000 MW per day. Over the past week, this figure has risen sharply to levels exceeding 9,000 MW.

Under normal circumstances, Greece’s interconnections in the north are primarily used for electricity imports which are then either absorbed by the local grid or relayed to Italy, Greece serving as a transit zone.

Wholesale electricity prices in neighboring markets north of Greece are generally lower than those available in Greece and Italy.

The increased electricity export activity presently witnessed through the country’s north once again highlights that electricity amounts acquired at local NOME auctions are not being used to intensify domestic market competition, as was intended by authorities, but, instead, greatly exploited by traders for export opportunities.

High hydropower, RES output, exports prompt SMP swings

The Greek electricity wholesale market’s System Marginal Price (SMP) has fluctuated wildly over the past three days, ranging from zero to 75 euros per MWh, key driving factors being the need to lower overfilled water reservoirs at hydropower facilities, increased RES sector output, as well as elevated electricity prices in Italy, which has spurred exports to the neighboring market.

Hydropower facilities have steadily provided 30,000 MWh over the past three days, while, during this period, RES output has risen to as much as 41,000 MWh, meaning the two sources have covered over half the country’s daily electricity needs.

Electricity imports rose to levels ranging from approximately 10,000 to 16,000 MWh over the past three days, while high prices in Italy have prompted electricity exports of roughly 9,000 MWh per day. This export activity has impacted Greece’s SMP during certain hours.

Last Sunday, for nine hours in total, the SMP was down to zero, whch lowered the day’s average SMP to just 29.41 euros per MWh. The increased contributions to the system by the hydropower and RES sectors left no room for imports, leading to the day’s zero-level SMP.

A day later, on Monday, the SMP rose sharply to 53.7 euros per MWh, and, for two hours, climbed even higher to over 75 euros per MWh, a level shaped by high-priced electricity exports to Italy.

A similar picture has prevailed today with the average SMP level positioned at slightly below 51 euros per MWh, as well as high-priced exports to Italy, which took the SMP to 71 euros per MWh for an hour.

The higher average SMP registered yesterday and today led to an increase in thermal production, reaching 52,000 MWh.

Lower international prices prompt decline in electricity exports

Latest market data released by LAGIE, the Electricity Market Operator, for January has confirmed a reduced interest, observed recently, for electricity exports through the country’s interconnections.

Electricity exports from Greece to neighboring countries fell considerably in January compared to December as well as January last year, both in terms of daily averages and monthly totals.

The subdued electricity export activity can be attributed to the electricity price drop in international markets.

This explains why local traders seeking export opportunities expressed little interest in the year’s first NOME auction, staged earlier this month.